Apparatus Purchasing: Beware of Outside Influences

BY BILL ADAMS

New fire apparatus orders and projected purchases are down as a result of the economic downturn. Because of intense competition for a limited number of orders, the fire service is experiencing sales and marketing strategies not seen in the past—some subtle and some aggressive. Fire apparatus manufacturers, dealers, and salespeople (i.e., vendors) must sell a given number of vehicles not only to be profitable but also to cover the basic costs of doing business. They must still pay for day-to-day operations whether a vehicle is manufactured or sold. Most vendors are making honest attempts to gain or retain market share. However, some aggressive sales hype and marketing strategies can place purchasers in precarious and undesirable positions.

THE PURCHASE DECISION

Most apparatus purchases are ultimately decided by people not directly affiliated with the fire service. After the fire department writes the specifications, puts them to bid, and receives proposals, the department’s chief or the chief’s designee (e.g., the apparatus purchasing committee) typically recommends which proposal to accept. Final decisions characteristically rest with a municipal purchasing department, a public administrator, a political appointee, or elected officials, who for the most part are not intimately familiar with fire apparatus and how they work. In this article, the person or entity making the final decision is referred to as the purchasing agent. Although there are independent fire companies that decide purchases by a majority vote of the membership, their decision making may also be subject to outside influences. No chief wants the purchasing agent to be unduly swayed by outside influences, including unsolicited optional and alternate pricing, nefarious cover letters, and ambiguous advertising, among other tactics.

JUSTIFYING SPECS

Most fire departments promulgate comprehensive apparatus specifications with precise, justifiable, and clear-cut requirements based on specific needs. The last thing a chief wants is to have an overzealous vendor—who may be unfamiliar with the department’s response area, operational criteria, and day-to-day requirements—inadvertently question his firematic purchasing decisions.

One way to counter aggressive sales hype and marketing is to make the purchasing agent part of your team. Involve the agent in the early stages of writing detailed specifications. Taking the time and effort to explain to the purchasing agent the intricacies of your specifications prior to a bid opening may alleviate havoc and misunderstanding afterward. A receptive purchasing agent who understands and concurs with your specific requirements prior to bidding may be less willing to consider unsolicited prices and questionable exceptions after the fact.

Another example is, after bids are received, the purchasing agent may focus only on the dollar difference between the unsolicited price for a 1,000-gallon booster tank vs. that of the specified 1,500-gallon tank you actually need. It would be a slap in the face to the chief to have to explain to the purchasing agent a vendor’s cover letter containing a dubious statement such as, “The optional 1,000-gallon tank we are proposing meets the intent of your specifications and, in actuality, holds almost three times as much water as required by National Fire Protection Association (NFPA) 1901, Standard for Automotive Fire Apparatus.” Note the vendor’s reference to the NFPA standard to justify his lower-priced option. The intent of the purchaser’s specification is a tank with a larger capacity than the minimum 300 gallons required by NFPA 1901. The vendor has met the intent; however, the specifications explicitly called for a 1,500-gallon tank. By proposing only a 1,000-gallon tank, the vendor has met the technical requirements. Concurrently, he is enjoying an unfair advantage in a lower tank cost and possibly a lower body cost, to accommodate the smaller tank, and probably less expensive gross vehicle weight rating conponents such as axles, tires, and suspension.

Let the buyer beware: You are on a two-way street. Apparatus purchasing committees and chiefs also routinely use NFPA requirements to justify the desired purchases. They must also be prepared to justify and defend requests for purchases that exceed the NFPA’s minimum requirements. In the above scenario, the chief must justify the cost difference between the tanks and may also have to explain firematically why a smaller, less expensive tank is not acceptable, despite being almost three times larger than the NFPA’s minimum requirement.

Whether by accident, design, or deceit, the vendor has placed the chief in an awkward and potentially embarrassing position. When the vendor submits unsolicited pricing for unwanted items of lesser size, quality, or capacity, this could be construed as questioning the judgment of the chief. Visualize receiving multiple proposals, each with numerous unsolicited low prices for items you did not specify and do not want or need. Imagine having to justify rejecting each and every one to the purchasing agent. Unintentionally, this may cast a shadow of doubt on the fire department’s fiscal responsibility and firematic reasoning. That is unacceptable and should be prevented at all costs.

The fire department should be aware that a purchasing agent may be more concerned with current economic conditions, financial constraints, compliance with legal necessities, other municipal departments’ needs, and his personal job security rather than why you need that booster tank that is larger and more expensive than what a recognized and accepted national safety standard requires. Do your homework beforehand. Be prepared to firematically justify everything you specify. Be ready to respond to possible challenges. It is no different from preparing a fire response preplan for the anticipated “big one” at the warehouse downtown.

BID REQUIREMENTS

You cannot prevent a bidder from submitting a proposal with a cover letter containing dubious statements. However, you can preclude him from submitting unasked-for pricing and making statements that may be detrimental to the decision-making process. The purchaser can provide a preprinted bid form on which bidders are required to fill in the blanks with their prices. Instructions to bidders should be very clear in stating the following:

“Only prices submitted on the provided BID FORM shall be considered. Proposals containing unsolicited pricing, including alternate or optional bids not expressly called for herein, shall be declared informal and shall be immediately rejected. No prices, bids, or proposals shall be considered unless specifically requested and all bidders have had an equal opportunity to provide the same.”

Statements similar to the preceding may prevent bidders from submitting unsolicited prices and questionable claims. Not only are you making the playing field fair and equitable, you are making the purchasing agent’s job easier. In addition, you may be preventing vendors from inadvertently questioning the specification writers’ judgment and decision making.

At the same time, purchasers must be aware that they are obligated to comply with applicable state and local laws regarding municipal bidding and purchasing. Rules, regulations, and laws promulgated by political subdivisions are very explicit when it comes to expending tax dollars. They carry much more legal weight than the whims and desires of an apparatus purchasing committee and, if not adhered to, the purchaser may be subject to legal recourse.

Purchasers should remember that apparatus vendors are coping in the same economic environment as the fire department, and they will exercise every legal opportunity to make a sale. If your specification does not specifically prohibit unsolicited pricing, you can be reasonably assured a vendor may take advantage of it. That is his job and livelihood, and he is justified in doing so. Should unsolicited pricing pose a detriment, prohibit it during the specification writing process—not after the bid opening.

Note that requesting optional and alternate bids can reap financial benefits for purchasers, especially when trying to keep costs within budgetary limits. The purchaser should provide a defined and well-structured procedure for requesting alternate and optional pricing that allows all prospective bidders an equal opportunity to provide similar pricing.

AGGRESSIVE ADVERTISING

Vendors aggressively use advertising—an area the purchaser cannot influence. In the past, fire apparatus advertisements expounded on the materials used and the product’s ruggedness and durability. Manufacturers emphasized their years of experience, their construction methods, and the names of satisfied and long-term customers. However, today’s advertising uses terms seldom used previously in the fire apparatus industry. Whether the advertising is intentionally misleading, purposely nebulous, or overly aggressive is left to students of sales and marketing.

Common phrases seen today include “affordable,” “economically feasible,” “entry level,” “free upgrades,” “budget conscious,” and “value added.” Does such terminology influence the decision-making process? Will advertising claims outweigh adherence to technical specifications? Will vendors’ low dollar figures in unsolicited optional and alternate bids have more credence than the vendors’ compliance with specifications?

As previously mentioned, most apparatus purchasing decisions are determined by people not directly affiliated with the fire service. Public administrators may not understand or appreciate why the fire department needs a particular fire apparatus and the myriad accessories and accoutrements specified. Their job is to ensure the fairness of the bidding process, adherence to purchasing laws, compliance with written specifications, and proper expenditure of tax monies. However, be aware that a purchasing agent may clearly remember his last personal car purchase had to be “affordable,” the refrigerator he bought was “economically feasible,” his son’s laptop was an “entry-level” model with “free upgrades,” his daughter enrolled in a community college because the family is “budget conscious,” and his wife shops at a discount store because of its “value-added” features.

BILL ADAMS, a 40-year veteran of the fire service, is a former fire apparatus salesman. He is an active member and past chief of the East Rochester (NY) Fire Department.

 

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